Brazil based JBS to be world's largest meat company

Brazilian beef producer JBS SA is rocking the global meat business with two deals announced Wednesday: buying a major stake in suffering Texas chicken producer Pilgrim's Pride and a merger with meat giant Bertin.

Brazil is taking advantage of the current global economic crisis of which it seems the Latin American country is suffering the least.

JBS said it will buy a majority stake in Pilgrim's Pride for $800 million, in a deal that includes paying off Pilgrim's Pride's creditors in full and distributing new stock to current shareholders.

Furthermore JBS merges with Bertin SA, one of Latin America's largest producers and exporters of milk products, beef and leather.

The combined JBS-Bertin group will be the world's largest meat producer with an annual income of $28.7 billion, just a little bit more than Springdale, Arkansas based Tyson Foods Inc.

It will have operations in North and South America, Africa, Europe, Russia, China and Australia.

Entry in US poultry market

Pilgrim's Pride was the US's largest chicken producer with about 23%t of the US market before it filed for bankruptcy protection late last year.

The company was hobbled by debt from its buyout of competitor Gold Kist and by high feed costs that left much of the industry in a slump.

The sale gives JBS an entry in the US poultry market. Pilgrim's Pride was attractive to JBS since chicken is a new market and Pilgrim's Pride had been the US leader.

Pilgrim's Pride said the deal is subject to antitrust clearance. US regulators earlier this year sued to block JBS' acquisition of a major beef producer, citing pricing concerns for consumers and producers. The $560 million deal with National Beef Packing Co. was later dropped.

JBS already is a top producer of beef and pork in the US and the world. With the deals announced Wednesday, it will be the largest beef producing company in Brazil, Australia, Argentina and Italy.